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August 26, 2013

How long should I wait Mr. RETAILer? -Part II

Retailers have lots of sophisticated functions available in an ERP system to effectively serve customers. But, it takes more than these functions to fulfill the three important needs of the customer i.e.  Making sure that product is available at the right price, at the right place and at the right time.  The three significant ways to strengthen a retailer system are:-

Maintaining accuracy of inventory data

Most retailers have detailed inventory data available in their systems i.e. book stock information regarding the amount of stock of every item in the store.  Book stock reports are created to report stock availability in store and are used as main basis for availability figures. However, the correctness of data is limited by:

  • Movement of stock by customers in the store between display and payment point.
  • Damage to the product and thefts.

When a book stock report is wrong, ineptness in store operations creep in.  That's why retailer should not rely on one source of data.  The retailers can use crowd source data methodology to bring in more accuracy to inventory data and effectively reduce OOS events. In crowd sourcing consumers are asked to report their views on product availability in the store using:

  • Web surveys.
  • Social networking sites.

This helps in getting feedback about the products which customers often find out of stock. The retailer can then bring distinct focus on book keeping of such products, increase buffer stock for them or increase their delivery frequencies.

Simplifying the replenishment system

The retail store that I visited was using a forecast based replenishment system designed to analyze data from over long time periods. In retailing world, replenishment often starts with a reverse principle: the most complicated way of doing something is the best. I have seen lot of complex ERP solutions becoming ineffective over the period of time and I think same could be happening in this store. 

In my opinion, it is not easy to evaluate sales history and seasonal patterns in forecasting for all the products.  I would rather have retailer a mixed approach to determine replenishment quantities instead of forecast based replenishment. This mixed approach could include forecast based planning for one set of products and min-max replenishment approach for another set of products. This way supply chain team would have better control on the replenishment.

Revamping Point of sales (POS) system

The slow and inefficient handling of payments at the cashier desk discourages a customer visit a store again. POS is the best time for a retailer to interact with a customer and a good POS streamlines the invoicing process.  The POS at the retail store that I visited should be configured to handle mismatch in price checks in customer's favor, allow cancellation by billing clerk (and not restrict this authorization to store manager), update inventory and handle any other customer interactions impacting customer satisfaction.

August 22, 2013

Selling SAP Data Archiving to your business....

Selling SAP Data Archiving to your business....


Every transaction executed in SAP, every output generated, every document saved creates data. Companies having large volumes of data typically have an advantage over the ones where the right data is not available. But every data has an associated time value. Smart and efficient organizations track and manage data across the data life cycle and make conscious decision to 'unplug' this data once it reaches its shelf life.

The challenge however lies in executing any such data management exercise. Data in organizations is administered by system administrators; however the real owners of data are business.  It is human nature to retain data for future reference and use. This is very evident with ever growing size of our mailbox, growing size of the storage on our personal devices and much more. So the biggest challenge is to find an answer to the question- 'what if I need data?' Selling data management- whether it's in the form of deletion, archiving, moving to offline storage, is the biggest challenge organizations face. Businesses typically don't see any evident benefit associated with such an initiative but for system administrators, this is a clear case of direct and quick benefits.

Let's see what can be a good 'selling strategy' when such conflicting interests are at stake.

Quantified Benefits- Faster system performance and savings on expensive SANs are the biggest benefits associated with data archiving.  The real challenge is to quantify these benefits in advance. Although an accurate figure can never be guaranteed, however a high level estimate can always be arrived at. Improvement in system performance can definitely strike a chord with business.  A quick demo in test environment by executing some reports, after data is removed, can help win confidence.

Archiving is NOT Data Deletion- The most common misconception is that archiving is equivalent to data deletion. As part of data archiving, some data can be deleted, but data which is important and meaningful is not deleted but only archived and hence can be mostly retrieved back. Setting this expectation at the onset is extremely important.

Business as Partners - Data archiving can never be an IT initiative alone. One of the key success factors is to engage business at the start itself. Having people who understand the data, its usage, linkage to business flow, in the project team would not only help mitigate any risks associated with data archiving but would also help in ensuring seamless integration with other business initiatives.

Phased Approach- Archiving in an organization can never be a 'step function'. Archiving is a journey and cannot be completed with a single project. To get buy-in from business it's important to first target the low hanging benefits.  This will go a long way in establishing credibility of the solution.  Typically, organizations prefer to first archive/delete the technical data (like system logs, IDOCs) before moving on to the more business facing data.

Archiving today is much more than traditional archiving- System enabled retention policy definition, automatic data destruction, e-Discovery and Legal holds are some of the standard features available in data archiving solutions today.  For the most part, business would have seamless access to archived data. The other standard features go a long way in increasing the overall efficiency of organization at large. It is important to articulate these facts clearly to the right audience.

SAP data archiving is not only about savings in space but more importantly about enhancing end user experience through improved system performance. Organizations should understand that no solution is perfect, however within the realm of known constraints, SAP data archiving always makes for a profitable business case. 

 

 

August 6, 2013

Should SAP Build MDM with SAP HANA ?

 

MDM (Meter Data Management ) and SAP HANA are the frequently heard buzzwords when working in Utility industry. Recently I thought of a question on why should Utility company opt/buy both MDM and SAP HANA ? Though the two products results in different outputs, huge data storage and processing is common in both the products. Why should Utility pay for 2 different products for storage of huge data which is commonly used as input to get different results ? Can SAP build functionalities of MDM in HANA in future which will reduce the cost and maintenance of one product.

SAP has positioned HANA as its solution to big data challenges. Main features of SAP HANA are

  • With In-memory computing powers the processing of historical & real-time data will be more than 100 times faster for analysis and helps in taking decisions on the spot for time critical transactions/issues.
  • Large volumes of non-aggregated data loaded / replicated to analyze & process planning and forecasting. Large number of users can query the data in parallel.
  • Analytics for  Usage, Billing & Forecasting is one of the main feature used to analyze the trend and forecasting and so used for better decision making
  • SAP HANA's Business & user friendly data model will allow flexibility for users to understand the Usage, Billing, forecasting and what-if.

MDM  is Meter Data management system which performs long term data storage and management for the vast quantities of usage data and events imported from head end systems that manage data collection in smart metering landscape. An MDM system will typically import the data, then validate, cleanse and process it before making it available for billing and analysis. Itron IEE and eMeter are few of the examples of the MDM products in market.

Main features of MDM systems are

 

  • Import/Load/Collect the consumption data from different types of source systems
  • Collected data will be Validated, Estimated and edited for any gaps/corrections with automated and manual routines and schedules.
  • Export the data to different types of destination systems so that consumption data is available for billing calculations.
  • Aggregates data and performs other calculations which can be used for reporting , analysis and forecasting purpose.
  • Presents data in table or graphical view which is interactive.
  • MDM may also provide reporting capabilities for load and demand forecasting, management reports, and customer service metrics.

 

 

If we compare the main features of MDM and HANA, VEE processing is the One major feature which MDM has and HANA does not have and another major difference is in architecture where HANA is provided with in-memory computing which is not available in MDM. So in future, if SAP can build MDM with HANA then SAP's new product would have advantages of HANA's in memory computing which makes it fast and MDM's VEE processing. This new Product can be used for  processing, reporting and analysis purpose by not only end users from Utilities but also customers who can access their data on real time basis. Also SAP can demand for more business as this will reduce the complexity  of landscape and so overall cost to the Utilities.

 

I would like to conclude by saying that it would be good idea for SAP to come out with MDM on SAP HANA Product which could become a potential competitor for MDM products like itron, eMeter etc.

August 5, 2013

Making services procurement yield savings through SAP SRM 7.0

Share of Services spend as percentage of total procurement spend has been growing steadily over the years and is expected to grow further. However many organizations are still  facing challenges when it comes to managing services procurement.

Major pain points related to services procurement:

Typically services spend account for roughly around twenty (20) percent of the total purchasing volume, however procurement organizations do not have as much negotiation power over services spend as they have for material buying. Most of the purchasing organizations still struggle when buying services. The typical problems involve lack of transparency, maverick buying and poor supplier collaboration in services spend.

Though the services spend constitute a sizable chunk and offers good opportunity for easy saving, managing services is not on the radar of most of the purchasing organizations. The problem is compounded by lack of visibility and creation of silos in various functions leading to cost leakages across entire processes.

How can SAP SRM help in managing services spend:

SAP SRM 7.0 provides following features to manage services:
• Strategic Sourcing of services through SRM bidding engine
• Supplier collaboration for service entry and invoice creation
• Support for multilevel hierarchical services allowing easy management of complex  services.

As SRM is tightly integrated with ERP (SAP ECC) system, it provides a seamless flow of business processes in services procurement scenario till the final payment to supplier.

Service specifications for complex work can be maintained in a tiered hierarchical structure in ERP system. This helps in easy ordering and data maintenance. Whenever a services requisition is created within ERP system, the requisition can be sent to SRM system for sourcing based on certain criteria.

After successful sourcing, requisition can be converted into Purchase Order and sent to supplier portal for supplier collaboration processes. Supplier users can create service entry and send to ERP system for acceptance by Requester. Upon acceptance, supplier can create invoice and send it to ERP system for payment processing. Depending upon configuration payment status check can be enabled for supplier through supplier portal.


The major benefits of this solution are:
• Reduced costs and cycle times through collaborative services procurement.
• Improved transparency and visibility across end to end processes
• Automation of service entry and invoicing process by bringing supplier in loop
• Easier tracking of services performed and available Purchase value
• Increased compliance to competitive pricing due to state-of-art bidding features of  SAP SRM
• User friendly UI of SAP SRM leading to easy adoption of system

The limitation with this solution is its restriction to SRM classic scenario implementation. However customers can adopt the solution in extended classic scenario through a small custom development.

Overall this solution offers good value proposition for customers who are having SRM 7.0 implemented and have considerable services spend to leverage cost savings.

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